The Aug Brent Futures contract saw a fairly muted morning in terms of price action, where it opened at $79.70/bbl and has failed to move much either way. After briefly breaking $80.00/bbl and touching $80.10/bbl at 09:04 BST, it has retraced and is now trading at $79.75/bbl as of 11:15 BST (time of writing). In a surprising turn of events, we see a rise in political uncertainty in France following Emmanuel Macron’s decision to call for a national snap election. While this was in response to a bruising loss in the European elections on Sunday, we will have to wait to see the outcome of Macron’s unexpected move when the vote commences on June 30. China, the largest crude importer, saw imports decline of 1.05mbpd in May this year compared to May 2023. This appears to be in direct contrast with OPEC’s monthly outlook for May, which expected stronger Chinese crude imports amid a recovering economy. In addition, while OPEC expected a better 2H’24 from China’s crude oil imports, at current levels, this recovery would have to be exceptional to be on par with OPEC’s expectations. Conversely, China saw a m-o-m increase in iron ore imports in May, although this is suggested to be added to their inventories instead of pumping steel production. The front-month and 6-month Brent spreads are $0.28/bbl and $2.14/bbl, respectively.
